Archive for January 1st, 2009

My New Year’s Eve proved to be a restless evening compounded by a nasty head cold and a thought that kept swirling around my head. The ongoing talk surrounding money, and the things connected to it (e.g., jobs, homes, etc.), seems to have focused on money as the end versus the means. The thought I keep coming back to is when will we start talking about and focusing on doing or making something without money entering the conversation?

First, I must clarify that I recognize the necessity of money. For many, it’s the only tender that can be traded for things like food and shelter. My argument isn’t about money in a good versus evil sense, but rather how we allow it to define our lives.

Second, the value of money and the things we buy with it has proven to be a very flexible thing. People who believed their homes would finance a move into an even larger residence or even fund their retirement are facing mortgages now worth more than the value of their home. Investors have watched as their portfolios followed the downward market trends, leaving many to wonder how they’ll ever regain what they’ve lost.

Finally, I’m a believer of efficient markets and the underlying principles of capitalism, so I’m in the group that believes current circumstances will improve for the better. However, despite the potential for improvement, I still come back to my original conundrum: do we need to change how we think about money?

Money: For Better or For Worse

I like money. I like what it allows me to do and the experiences that it makes available to me. At times, I’ve allowed myself to be caught up in the idea that money was the desired goal rather than a vehicle for something more tangible. I believe that one of the reasons so many are upset about the current economic crisis is a fear of whether they can still do anything or produce something of value. Consider the focus we’ve placed on being able to replace and upgrade. If you believe there’s nothing about you that makes you impossible to replace that’s cause for fear.

In recent months, we’ve heard the phrase “too big to fail.” I wish that I’d heard more about people who were too valuable to lose. Our focus has been on the institutions and what they represent (often money) and not on the people who actually make things happen.

When the Detroit automakers went to Washington, D.C., looking for financial assistance, more than one person called for a change in leadership of these companies. But I never did hear who should replace the CEOs of any of these companies or what the new leaders should do.

A cornerstone of President-elect Obama’s financial recovery package focuses on rebuilding America’s infrastructure. I’ll be curious to hear when the focus shifts to making sure there’s something worthwhile for all that infrastructure to connect. For example, what is Detroit without car manufacturing? Does any industry currently exist that could move in and support the city if the car manufacturers go away? What about the cities who rely on carbon energy production?

At some point, regardless of whether you believe the prophets of doom or the overly optimistic naysayers, we’ll pump and mine the Earth dry. And if something ceases to be available it doesn’t matter how much money you have at your disposal.

What Happens If We Stop?

If we stop creating, if we stop producing, we will find ourselves in a bind, particularly if we only chose to do so because of money. Yes, we need money to survive, but when do we cross the line from survival into servitude? I’m the first to admit that I like my creature comforts and that I like having enough money to fulfill those wants, but I also try to be wary of allowing it to drive my decision making.

Consider many of the corporate CEOs in recent history who were driven more by the pursuit of money than the production of something valuable. Enron, WorldCom, and Bear Stearns are just a few of the more egregious examples. So where does that leave us now?

I believe our long-term success, and happiness for that matter, will be determined by our ability to make more than just money. Yes, money holds a powerful sway on society as a whole. We tend to admire and often idolize those who make large sums of it. But how would our perception of those people change if they suddenly didn’t have their huge sums of money? Would they, as individuals, still be worthy of our attention?

The Warren Buffett Lesson

I wonder often about why Warren Buffett has chosen to stay in his original home in Omaha, Nebraska. As the richest man in the world, he could live wherever he wanted in whatever type of home. His decision for staying fascinates me from the standpoint that we’re so often bombarded with the message that bigger translates into better.

On top of his housing selection, Buffett’s decision to donate to various charities 85% of his Berkshire Hathaway stock prior to his death also intrigues me. To me, his actions are an example of turning money into something tangible. The end goal doesn’t appear to be about making more money but rather about making lives better. Such actions may lead to the creation of more money, but the immediate goal is one of giving back to improve current circumstances.

Since the end of World War II, we’ve been a nation focused on consumption. I wonder when we’ll figure out that at some point, they’re won’t be anything left to consume if we don’t refocus our efforts on producing things of value.